Exports seeking high and sustainable growth can no longer stand outside increasingly stringent sustainability standards, ranging from environmental protection and labor requirements to traceability.

Sustainability standards: opportunity or challenge?

As Vietnam’s exports look for stronger and more sustainable growth drivers, sustainability standards have increasingly become a new “barrier,” directly affecting enterprises’ ability to access markets. At the seminar “Solutions for High and Sustainable Export Growth” held on December 16, Ms. Nguyen Thi Thu Trang – Legal and International Economic Integration Expert and former Director of the WTO and Integration Center (VCCI) – highlighted a clear reality: sustainability is no longer a distant concept, but an immediate requirement for Vietnamese exporters.

Alongside e-commerce, which is considered an inevitable export channel in the coming period, sustainability-related issues are increasingly dominating international trade. Notably, today’s sustainability criteria no longer stop at basic “safety” standards as in the past, but have been elevated to much higher benchmarks, with increasingly detailed and stringent requirements, particularly regarding the environment, emissions, social responsibility, and supply chains.

According to Ms. Nguyen Thi Thu Trang, whereas standards previously focused mainly on product safety, many markets now impose maximum allowable thresholds for environmental factors, forcing enterprises to reassess their entire production and export processes. These requirements directly affect many sectors, including those currently achieving strong export growth, such as agriculture.

One major change enterprises must confront is that sustainability standards entail new costs. For example, steel exporters to the EU, in addition to normal production costs, must pay additional charges related to CO₂ emissions under the Carbon Border Adjustment Mechanism (CBAM). This is not merely a technical issue, but a financial one that directly impacts the competitiveness of goods.

Beyond that, policies expanding taxes, fees, and extended producer responsibility are being applied in many markets. Currently, around 20 product groups are subject to standards related to producer responsibility, creating significant pressure on enterprises, particularly in terms of costs and implementation capacity.

Another increasingly common requirement is supply chain and origin disclosure. According to Ms. Trang, there are cases where importing markets do not yet require enterprises to pay additional fees but do require the submission of reports related to emissions or sustainable practices. In reality, over the past three years, the European Union has not required companies to pay emission fees, but has mandated emission reporting. To meet this requirement, enterprises must invest substantial resources and costs in monitoring, measurement, and reporting systems.

These impacts pose major challenges, first and foremost in terms of awareness. Ms. Nguyen Thi Thu Trang shared that in her work with enterprises, many still consider sustainability standards to be “far removed.” However, in practice, many standards are rapidly approaching and have even become mandatory conditions for maintaining exports. Enterprises need to clearly understand that being able to export in previous years does not guarantee continued exports in subsequent years without proper preparation.

From Awareness to Action

The journey from awareness to action is not short. According to Ms. Trang, to comply with sustainability standards, enterprises need systematic preparation, with many requirements only achievable through the application of new technologies. For instance, emissions reporting and traceability require data systems and technologies capable of monitoring the entire production chain.

In the coffee sector, a key export commodity, the journey from farm to export often involves multiple intermediaries. Traceability cannot stop at the enterprise level, but must extend to each growing area and each batch of products, from cultivation methods to harvesting processes. This is almost impossible without appropriate technological solutions.

In livestock farming, requirements extend further to animal welfare. To export meat to the EU, enterprises must meet standards related to farming conditions, slaughtering, transportation, and the treatment of animals throughout the process from farm to export. This involves not only production lines, but also labor conditions and practices related to animal welfare.

Another factor that cannot be overlooked is compliance costs. Enterprises must have the capacity to regularly monitor standards, maintain implementation systems, and continuously update new requirements. This is a considerable burden, especially for small and medium-sized enterprises.

However, according to Ms. Nguyen Thi Thu Trang, sustainability development in Vietnam is no longer an overly distant story. In reality, Vietnam has been better prepared and increasingly confident in approaching sustainability standards. The key issue is for enterprises to focus on prominent standards while proactively monitoring higher-level requirements, rather than stopping at the minimum threshold.

New standards certainly pose challenges in terms of costs and implementation, but “difficult does not mean impossible.” Notably, sustainability-related reviews currently prominent in Europe are likely to spread to other markets in the near future.

A positive point is that sustainability standards usually come with roadmaps. For example, CBAM took effect in 2023, but will only begin enforcement in 2026, and full financial obligations will apply from 2034. This provides enterprises with time to identify, prepare, and adjust their strategies.

From this, Ms. Nguyen Thi Thu Trang offered several important recommendations. First, sustainability standards are not confined to advanced markets such as the EU, but are gradually becoming common norms in global trade, including in major markets such as China. Alongside challenges, sustainability also opens up potential market “niches,” particularly in organic, green, and environmentally friendly segments.

Although initial costs may be high, in the long term, implementing sustainable solutions can help enterprises reduce costs, increase profits, and improve business efficiency. This is a worthwhile investment, with appropriate roadmaps and steps depending on each enterprise’s scale.

Green transformation, according to Ms. Trang, is first and foremost the responsibility of enterprises themselves. Enterprises must proactively study and comply with requirements, especially mandatory standards, while taking advantage of the preparation time provided by policy roadmaps. Moving too fast may exceed capacity, but moving too slowly may leave enterprises unable to meet market demands in time.

Finally, enterprises are in great need of information support. Providing market information, trade connections, and updates on sustainability policies from management agencies such as the Import–Export Department, together with the participation of industry associations acting as “green hubs” for each market, will be critical factors in helping Vietnamese enterprises seize opportunities and overcome challenges on the path toward sustainable exports.

Exporting enterprises need to change their mindset early, viewing sustainability standards as mandatory requirements rather than optional choices. First, enterprises must proactively learn about sustainability standards in each market, especially mandatory standards with clear implementation roadmaps. At the same time, they should gradually invest in technologies supporting traceability, emissions reporting, and supply chain management. Although initial costs are significant, in the long term, transitioning toward sustainability will help enterprises enhance competitiveness and maintain stable export growth.

Source: Công Thương Newspaper